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Xi-Biden Reach for Low-Hanging Fruit As Real Answers Keep Blowing in the Wind

Bilateral relations nose-dived last year because of the visit of the then US House Speaker Nancy Pelosi to Taiwan.

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President Joe Biden met his Chinese counterpart Xi Jinping in San Francisco at a summit on the sidelines of the Asia Pacific Economic Cooperation (APEC) meeting. The principal outcome was the decision of the two countries to resume their military-to-military communications and for China to assist in a crackdown on the production of fentanyl precursor chemicals.

Surprisingly, there was no reference to climate change, though in a separate meeting in Sunnylands, California, China and the United States agreed last week to back a new global renewables target and work together on methane and plastic pollution.

This was the first meeting between the two leaders since their summit in Bali on the sidelines of the G20 meeting last year.
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Important Issues Sidelined

There were expectations that the troubled ties between the two countries would improve, but the spy balloon incident soon brought ties to their lowest in decades. For this reason, both sides kept expectations from this summit low.

While going into the meeting the two sides perspectives were laid out in their opening remarks. Biden outlined the importance of ensuring that their competition "does not veer into conflict.” And that the two sides manage their competition "responsibly”.

After the meeting, President Biden said that his talks with President Xi had been the "most constructive and productive”. While the decisions on fentanyl and military communications were announced, the two are bound to have discussed other contentious issues like Taiwan, the ongoing Israel-Hamas war, and their economic relations, including American technology sanctions on China.

The key outcome of the meeting is that the world’s two major powers are likely to stabilise their relationship and ensure that they can talk through their differences rather than adopt a confrontationist approach which could have global repercussions.

Competitive Yet Cordial for Geo-Political Interests

Speaking at a press conference after the meeting, Biden said, "We’re in a competitive relationship, China and the US, but my responsibility is to make this rational and manageable so it doesn’t result in conflict."

He added that the goal was to find a situation where China and the US “can come together and find mutual interests.”

Speaking at a meeting with CEOs after the summit, Xi said that China wanted friendship with the US and “China does not want to seek spheres of influence and will not fight a cold war or a hot war with anyone.”

He repeated his disagreement with the US characterisation of China as a “competitor”,” pacing threat” or a “consequential geopolitical challenge” saying that this would only lead to “misinformed policy-making, misguided actions, and unwanted results.”

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Economic Factors A Mainstay For US-China Ties

Xi. on the other hand, maintained that “major country competition is not the prevailing trend of current times.” Adding that "Planet Earth is big enough for the two countries to succeed, and one country’s success is an opportunity for the other.”

He said that the US-China relationship was "the most important bilateral relationship in the world” and it had had its ups and downs in the past decades, but “turning their back on each other is not an option.”

Despite their estrangement, there is a lot that binds the two major powers. Their bilateral trade amounted to almost USD 760 billion in 2022 and the value of investments in physical and financial assets was of the order of USD 1.8 trillion.
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Economic ties are the key binder and not surprisingly, it set the stage for the San Francisco summit. Among the prominent US visitors to Beijing in recent months have been Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo. And considerable groundwork was laid by Yellen and Vice Premier He Lifeng who met for two days in San Francisco earlier this month.

US Officials like Yellen and National Security Adviser Jake Sullivan have taken pains to acknowledge the US-China economic relationship and say that their aim is not to decouple from China, but to put in place measures that would ensure that the US technology did not benefit the Chinese military.

After her recent meeting with He, Yellen noted that the talks had been "candid, direct, and productive.” She made it clear that the US would use economic tools “to protect our national security interest.” But its perspective also included "a healthy and stable” economic relationship which would benefit both sides “and offers a level playing field for American firms and workers.”

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US Has An Upper hand in the bilateral equation 

In September, the US and China had launched an Economic and Financial Working Group and both groups have met recently to begin the process of dealing with the economic and financial issues between the two countries. The Chinese are probably hoping that the process could help to moderate US restrictions on technology transfers that are weighing on the Chinese economy.

Another tangled issue that would have been discussed is that of Taiwan. Xi came looking for assurances that the US would discourage political leaders there from brinksmanship in relation to the status of the island. On the other hand, even while emphasising its “One China” approach, the US would not like Chinese interference in the island which has a presidential election coming up in January. Bilateral relations between the two countries nose-dived last year because of the visit of the then US House Speaker Nancy Pelosi to Taiwan.

A readout of the meeting issued by the White House noted: that the leaders have affirmed the need to address the risk of "advanced AI systems and improve AI safety" through government-level talks. This relates to the growing fears that AI could be incorporated into military and nuclear operations. While both sides agreed on this, a US official later said, they were not yet ready for any mutual declaration.

While both leaders had a stake in a successful outcome of the meeting, Biden went into the meeting from a position of strength. The US economy is doing very well and his goal was to manage the Chinese relationship within the boundaries set by his administration.
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He faces an election and there are extreme voices in both parties seeking to derail US-China ties which could have negative repercussions for everyone.

On the other hand, Xi is dealing with a slowing economy and the pressure to reassure foreign investors that China is still a going concern and open to the world. It is dealing with a crisis in its property sector, as well as with youth unemployment.

Not surprisingly, among Xi’s meetings in the US was with a group of US CEOs which included Tim Cook of Apple, Elon Musk, Boeing CEO Stan Deal, Blackrock CEO Larry Fink, Blackstone CEO Steve Schwarzman, Bridgewater Associates’ Ray Dalio, Pfizer Chairman Albert Bourla and Visa CEO Ryan McInerney.

(The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

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